Health and Care Bill

Lord Crisp Excerpts

Lords Hansard - Part 3 & Committee stage
Wednesday 26th January 2022 Lords Chamber

Moved by

[Lord Crisp]

188: Clause 54, page 53, leave out lines 18 to 20 and insert—
“(a) an individual trust, and(b) the capital expenditure limit.”Member’s explanatory statement
This amendment along with the other amendments in the name of Lord Crisp to Clause 54 seek to deliver the legislative proposals agreed with NHS England and NHS Improvement in 2019.

[Lord Crisp (CB)]

My Lords, my five amendments to Clause 54 follow on quite closely from the discussions we have just been having about direction. I am very grateful to the noble Baronesses, Lady Walmsley and Lady Morgan of Huyton, and my noble friend Lady Neuberger for their support for these amendments.

The Bill introduces a new power for NHS England to set capital spending limits for NHS foundation trusts. There are two points of context that are worth exploring here. First, obviously the Bill is all about integration, partnership and collective action, within which individual parties need to retain some autonomy as well as giving out more, or perhaps pooling, some sovereignty at the local level. We should also be aware that at the national level NHS foundation trusts’ capital comes within the overall capital allocated by Parliament, and so recognise that, at the end of the day, there needs to be some kind of reserve, backstop power to set foundation trusts’ capital limits.

It is all about achieving the right balance. I understand that three years ago, as part of the thinking behind these wider changes in the NHS when they were being developed, NHS England and NHS Improvement agreed with foundation trusts a set of proposals for this that were set out in the NHS’s 2019 legislation proposals. I am sure my noble friend Lord Stevens of Birmingham can comment on that as appropriate. This clause cuts right through these agreements.

My explanatory statement makes the terribly simple point that what I am trying to do here is to

“seek to deliver the legislative proposals agreed with NHS England and NHS Improvement in 2019.”

I do not see why that is not happening. So, my first question to the Minister is: please could he explain what has changed since 2019 and why the agreement that was struck then is no longer good enough for the current circumstances?

Secondly, these capital freedoms are important. NHS foundation trusts need to be able to invest in order to deliver their services. They need to be able to do so for their boards to be able to exercise their own accountability, and they need to be able to plan. There is also a slightly softer reason why these are important as well, which is about motivation. It is very clear that working efficiently to generate capital to create that freedom is a significant motivator for clinicians within these trusts. I say that as somebody who led two trusts—not foundation trusts—into trust status in the 1990s, and I know how big an issue that is in terms of the staff within these organisations.

So, against that background, these directions should be exceptional and not the rule, and these amendments set out quite clearly ways to make this work in practice. Amendment 188 states that any direction must be about an individual trust and for a specific region and not in any sense a blanket action. Amendment 189 says that it should be used only after all other means of managing a capital expenditure problem have been exhausted; it must be very much a last resort. Amendment 190 says that NHS England should account to Parliament for the action, giving the reasons—telling the story, if you like—and publishing them so that they can be seen very clearly. Amendment 191 makes it clear that any directions should cease after one year, and Amendment 192 is more minor tidying-up. This is a very clear set of amendments which would put in place the 2019 agreement. I see no reason why that should have changed.

I have three questions for the Minister. First, why is this a change from that agreement? What has changed? Why can we not just have that agreement? Secondly, does the Minister agree that this must be very much a last resort, and therefore needs to be hedged round with these sorts of amendments? Thirdly, will the Minister ask his officials to look at this again, perhaps with the involvement of representatives of NHS foundation trusts and NHS Providers, as indeed happened in 2019? I beg to move.

[The Deputy Chairman of Committees (Baroness Henig) (Lab)]

My Lords, the noble Baroness, Lady Brinton, is taking part remotely. I invite the noble Baroness to speak.

--- Later in debate ---

[Earl Howe (Con)]

There will be money to address the backlog of repairs within that total.

Of course, it is our intention that a capital limit would be imposed by NHS England only if other ways of resolution had been unsuccessful. I will take the Committee through some of the detail, because it is important.

Amendments 188 to 192 would further restrict how the power can be applied. Amendment 188 would modify the clause by inserting “individual trust”. This modification is unnecessary because new Section 42B already ensures that an order relates to a single trust.

Amendment 191 would limit the order to one financial year, but, instead of that, the guidance prepared by NHS England will set out that any capital expenditure limits will apply to individual, named foundation trusts. We envisage that most will apply for the period of budget allocation, which is a single financial year.

Amendment 189 would insert steps that NHS England must take before applying the control and limit when an order may be made. The amendment also links the power with the capital planning function held by ICBs in new Section 14Z54. That plan may not always relate to a single financial year and can be amended in year; for example, for big capital projects, the plan could be set for several years, and in such a scenario it would be difficult to determine whether a foundation trust exceeded the plan in the early years. Amendment 189 would undermine the ability to impose the limit in a timely way and would mean that any limit could realistically be applied only when an overspend had already occurred or was committed to. That would risk funding being unfairly taken away from other areas.

Amendments 190 and 192 contain a requirement to lay a report before Parliament alongside a statutory instrument containing the order. That would cause significant delays in the power’s application. There is already a requirement in the Bill for NHS England to publish any orders which place a capital limit on a foundation trust and for guidance to set out the circumstances in which it is likely to impose a limit. We expect the guidance will also state that representations made by the trust will be published by NHS England.

As I mentioned, it is our strong view, supported by NHS England, that the powers and safeguards in the Bill create a proportionate and fair balance. These measures will ensure that if a foundation trust were actively to pursue capital expenditure that is not aligned with local priorities or affordable within local budgets, there is a means to prevent this as soon as possible.

[Lord Crisp (CB)]

I thank the Minister for that reply. I have one point to make and one question. My point is that an NHS foundation trust may cover an area that is bigger than one ICB, and some of the bigger ones obviously do, so it does not quite work in the way that the Minister talked about. My question, and it is my final question, is: will officials re-engage with NHS Providers on behalf of NHS foundation trusts to discuss this matter further in the light of what we are saying so forcefully to the Government about pragmatic solutions to find a way forward to achieve the right balance and what the Minister has said in his response?

[Earl Howe (Con)]

I had not quite finished the remarks I was going to make, so perhaps the noble Lord will bear with me. I was trying to say that the measures will ensure that there is certainty for all providers about their capital expenditure. It will also prevent the need unfairly to take planned funding away from other providers, such as NHS trusts, where NHS Improvement and, in future, NHS England, set routine capital expenditure limits just to keep expenditure within system control totals, or national capital limits when a foundation trust exceeds its capital limit. Operational detail of how capital expenditure limits are set is best dealt with, we think, in guidance, where we can ensure flexibility and future-proof the provision, rather than in the Bill.

I hope that those remarks are helpful and will persuade the noble Lord to withdraw his amendment this evening. I say to him, as I did at the start, that I have listened carefully to the points he has made in support of his amendments, and points made by other noble Lords, and I undertake to take these points away for further consideration between now and Report. I am aware that my officials are working closely with NHS Providers on a number of issues, and I very much hope that we can resolve any points of difference to everyone’s satisfaction.

[Lord Crisp (CB)]

I thank noble Lords who have spoken in support of the amendment, for the very clear message that has been given. I also thank the Minister for that reply and those final remarks about thinking about this further and discussing it as appropriate with NHS Providers. On that basis, I am very happy to withdraw my amendment.

Amendment 188 withdrawn.